Competitiveness of China's API Supply Chain Steadily Improves
China's active pharmaceutical ingredient (API) and intermediate sector demonstrated robust resilience in the first half of 2025, with both imports and exports recording growth against a complex global economic backdrop, according to industry analysis. While exports maintained steady development, a noticeable surge in imports, attributed primarily to short-term factors, is expected to normalize in the latter half of the year. This performance underscores China's critical role in the global pharmaceutical supply chain while pointing to the need for ongoing structural optimization and risk management.
A significant shift in export strategy is underway. The sector is progressively moving away from a volume-driven, price-competitive model towards more sustainable development. Following a period where companies reduced prices to retain market share amid global destocking and demand fluctuations, the stabilization and recovery of export prices in H1 2025 signal an improved competitive landscape. Performance varied significantly across product categories, reflecting corporate efforts to upgrade offerings and adjust market strategies. The import growth was largely fueled by temporary price increases for specific basic APIs and intermediates, a trend expected to moderate as global production capacity recovers and supply-demand balances.
Asia and Europe remained the dominant destinations for China's API and intermediate exports, with India and the United States persisting as the largest country-specific markets. However, exports to the U.S. saw a pronounced decline in the second quarter, impacted by weakened local demand and a sharp spike in shipping costs. This volatility has highlighted the risks associated with over-reliance on any single market.
In response, Chinese pharmaceutical firms are actively building more resilient international operations. Strategies include accelerating market development and product registration in Europe, Southeast Asia, and Latin America to diversify their market base. Companies are also extending their reach into upstream intermediates or downstream formulations to enhance integrated supply chain capabilities and strengthen cost control. Additionally, collaborative overseas expansion is emerging as a key trend, with companies sharing resources and channels to create scaled, clustered international models aimed at boosting the overall competitiveness of China's API sector.
Looking ahead, the sector continues to navigate challenges such as fluctuating maritime logistics costs and divergent global demand. Nevertheless, through persistent optimization of product portfolios, market diversification, and deeper industrial chain integration, China's API sector is positioned to solidify its pivotal role in global supply chains and achieve high-quality international growth.